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CS Professional · Compliance Management, Audit and Due Diligence · Internal Audit and Performance Audit

Asha Retail Ltd's board asks its internal audit function to review the economy, efficiency and effectiveness of the warehouse and logistics operations, which are non-financial activities. According to SA 610 (Revised), under which category of internal audit activities does this fall?

This is a review of operating activities. SA 610 (Revised) describes it as reviewing the economy, efficiency and effectiveness of operating activities, including non-financial ones. It differs from examining financial information, which tests transactions and balances, and from compliance reviews of laws and policies.

  1. AExamination of financial and operating information
  2. BReview of compliance with laws and regulations
  3. CReview of operating activitiesCorrect
  4. DEvaluation of internal control over financial reporting only

Explanation

The text describes review of operating activities as reviewing the economy, efficiency and effectiveness of operating activities, including non-financial activities. Examination of financial information involves testing transactions and balances, and compliance review concerns laws and policies. So the warehouse review is a review of operating activities.

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